The Optimist's Gambit: Behind Sam Altman's OpenAI Firing and Triumphant Return
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In a recent episode of Intelligent Machines, hosts Leo Laporte, Jeff Jarvis, and Richard Campbell sat down with Keach Hagey, author of the upcoming book "The Optimist: Sam Altman, OpenAI and the Race to Invent the Future." The conversation provided a fascinating glimpse into the power struggles, conflicting visions, and dramatic events that led to Altman's brief firing from OpenAI in late 2023, an event commonly referred to as "the blip."
Hagey's reporting reveals that Altman's dismissal stemmed from both long-term power struggles and specific instances where the board felt they had been misled. "There was a year-long power struggle about who should be on the board," Hagey explained. Despite not having equity in OpenAI, Altman exercised substantial de facto power, often rejecting board candidates while proposing his friends instead.
More concerning to the board were several safety breaches that Altman allegedly failed to disclose or misrepresented. Perhaps most damning was the discovery that Altman personally owned an "OpenAI startup fund" that the board had believed was part of OpenAI itself. When Altman testified before Congress claiming he had no financial stake in OpenAI, this arrangement became particularly problematic.
The final straw came when two executives—Chief Scientist and co-founder Ilya Sutskever and then-CTO Mira Murati—approached the board with evidence of Altman's behavior patterns. Ironically, Murati would briefly replace Altman as CEO during "the blip" before later supporting his return and eventually leaving the company herself.
Microsoft's reaction to Altman's firing proved decisive. As the discussion revealed, Microsoft immediately offered positions to any OpenAI employees who wanted to leave. This created leverage when 770 employees signed a petition threatening to defect to Microsoft if Altman wasn't reinstated.
"The employees were looking at millions of dollars each," Hagey noted, referring to a pending tender offer that would have valued the company at $90 billion. "They figured our equity is worthless if Sam leaves" since Altman was the relationship-builder with investors.
While Microsoft CEO Satya Nadella threw his weight behind Altman, the experience clearly shook Microsoft's confidence. The company has since built a "lifeboat" by hiring Mustafa Suleiman and acquiring Inflection AI, developing internal AI capabilities to reduce dependency on OpenAI.
Jeff Jarvis raised an important question about how "safety" was defined within OpenAI. Hagey acknowledged the slipperiness of the term, recalling how Altman once defined AI safety as "a world in which things would be better if AI existed than if they hadn't."
Similarly, the definition of Artificial General Intelligence (AGI) remains elusive. "It moves," Hagey said. "The company is increasingly open about the fact that nobody really knows what it is and it's barely definable." This ambiguity has practical implications—Microsoft's deal with OpenAI specifies that Microsoft loses access to OpenAI's technology once AGI is declared.
The conversation turned to OpenAI's current position and future direction. According to Hagey, the company is "trying to turn into a more normal company" with a restructured board and potential conversion to a for-profit entity. This transformation requires Microsoft's agreement, creating tension as the two companies' strategies increasingly diverge.
OpenAI's unexpected success as a consumer product company has complicated its relationship with Microsoft. "OpenAI has become a consumer product company, which I didn't see coming," Hagey observed. "It seemed like it was going to be an enterprise product that Microsoft was going to sell."
When asked about Altman's character, Hagey described him as a "fantastic salesman" whose "true superpower is as a fundraiser." She noted his ability to form connections with people based on shared interests and his generally calm demeanor—a contrast to Elon Musk's more volatile temperament.
"The thing about Sam is he is so much fun to talk to," Hagey said. "He just has a fascinating mind." Despite the evidence of duplicity that led to his firing, Altman comes across as "quite likable," someone you'd want to spend time with.
